JP/Seto Wardhana

In his closing remarks at the National Conference on Constitutional Law in Jakarta a couple of weeks ago, State Secretary Pratikno conveyed President Joko “Jokowi” Widodo’s desire to carry out regulatory reform. Among the efforts is to establish a special body to harmonize regulations and legislation.

The issue of regulatory disharmony was initially raised in the first presidential debate last January. President Jokowi offered the idea of establishing a new “national legislation center” that will be specifically tasked to overcome the problems of conflicting and overlapping regulations.

Currently, the authority to plan and harmonize laws and regulations is held by units under the Law and Human Rights Ministry, namely the National Law Development Agency (BPHN) and the Laws and Regulations Directorate General.

In line with the President’s idea of forming a national legislation center, the Organization of Economic Cooperation and Development in its 2012 report recommended that Indonesia establish a special body to conduct regulatory reform. One of the goals is to foster regulatory quality by evaluating a number of laws and regulations.

The causes of the disorderly regulatory system in Indonesia can be grouped into several conditions. First, legislative planning that is not in line with development planning. In each administration, the government has two guidelines, namely the National Medium-Term Development Plan (RPJMN) as a development planning document prepared by the National Development Planning Agency (Bappenas) and the National Legislation Program (Prolegnas) as a legislation-planning document prepared by the BPHN.

This parallel, but separated process has resulted in legislative products that are not in line with development needs. In the 2015 to 2019 period, there were 84 bills proposed in the RPJMN and 82 bills proposed in the government’s Prolegnas draft. Of these, only 70 bills were proposed through the two institutions (Bappenas and BPHN).

Second, the government and the House of Representatives consider the law a “panacea” or a solution to all problems. Indonesia has several levels of regulations, namely laws or national legislation made and mutually agreed by the President and the House, government regulations and presidential regulations (executive order) as subordinate legislations that serve as executive guidelines for the implementation of government policies, and local regulations or bylaws made and agreed by the heads of regional administrations and local legislatures that are only applied at regional levels.

According to Law No. 12/2011 on lawmaking, national legislation can only regulate specified issues mandated by the Constitution, such as human rights, citizens’ rights and obligations, division of state power and state finances. Yet many issues should be regulated in subordinate legislations. A study by Bayu Dwi Anggono shows that during the initial period of the post-Soeharto era until 2012, 14 laws did not comply to those guidelines.

Moreover, many laws are made with similar topics. Health professions are regulated in the laws on medical practice, health workers, nursing and midwifery. In the field of plantations and agriculture, the President and the House plan to deliberate the tobacco bill and palm oil bill, although some of the provisions are stipulated in the law on farmers protection and empowerment as well as the law on plantations. This certainly has the potential to cause overlapping or even conflicting provisions.

Third, the absence of monitoring and evaluation of the regulations. Formally, under the law on lawmaking, the legislation process consists of planning, drafting, deliberation, ratification and enactment. This process ignores the monitoring and evaluation stages. The Global Indicators of Regulatory Governance issued by the World Bank in 2018 showed that Indonesia did not have legal provisions requiring government institutions to do an “ex post review”, or evaluation after the issuance of a regulation and regulatory impact assessment.

The problem has resulted in many regulations that are still valid but not enforced. For example, Law No. 32/1948 on money circulation stipulates that any transaction above Rp 25,000 (US$1.76) must be made through a bank. This provision cannot be applied since the value of the currency has changed significantly from 1948. Since there is no obligation to evaluate such regulation, the law still applies, even though it cannot be implemented. Another case shows conflicting provisions regarding building rights title. The Agrarian Law provides a maximum 50 years’ entitlement, while the Investment Law determines a maximum period of 80 years.

This situation contributes to “hyper-regulation” in Indonesia. According to data compiled on the Law and Human Rights Ministry’s website, 8,945 new regulations at the national level were issued from 2014 to October 2018. Given the absence of an obligation to evaluate prevailing regulations, these new regulations could potentially contravene other regulations.

Despite the existence of the BPHN and Laws and Regulations Directorate General, the legislation system under the law on lawmaking does not give sole authority to any institution in managing all regulatory issues.

This problem justifies the need for a national regulatory body as a special institution authorized to make quick and strategic decisions in the regulatory management system in Indonesia.

Thus, to solve regulatory problems, President Jokowi should combine the development planning process with the legislative planning process and propose a monitoring and evaluation mechanism to be incorporated into the amended law on lawmaking.

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Researcher at the Indonesian Center for Law and Policy Studies and lecturer at the Indonesia Jentera School of Law.

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